# Do you have to prove how you spent an SBA loan?

**Short answer:** Often yes, through your lender. SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.3 requires the lender to document each disbursement and get evidence such as paid receipts. Working capital spent on normal operating expenses does not need to be documented.

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Last checked: 2026-11-08

Usually yes, through your lender. Section B, Chapter 6, Paragraph D.3 of SOP 50 10 8.1 requires the lender to document each disbursement on an SBA-guaranteed loan.

## What the file must show

The documentation must show the recipient, date, amount and purpose of each disbursement. On most 7(a) loans, you and the lender sign SBA Form 1050 or the lender's equivalent at first disbursement.

SBA Express, Export Express and 7(a) Small loans skip Form 1050. Those lenders use the same written closing and disbursement procedures as for similar non-SBA loans (Para. D.11).

## What counts as evidence

- Cancelled checks or paid receipts
- Joint payee checks
- Receipts or invoices marked paid by the seller or vendor
- An electronic funds transfer to a vendor, with a copy of the invoice

## The working capital exception

Working capital that pays normal operating expenses, such as payroll and utilities, does not need to be documented (Para. D.3.c). That applies when the SBA Terms and Conditions list working capital as a use.

## Your own records

You certify that you will keep proper books and records, give the lender and SBA access, and furnish financial statements when asked (Para. D.8). SBA can review a lender's file at guaranty purchase and during oversight, so keep invoices and statements for what the loan paid for.

## Sources

- [SOP 50 10 8.1, Sec. B, Ch. 6, Paras. D.3, D.8 and D.11, Loan Closing and Disbursement (Para. D begins p. 207)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)